PHMSA, Alyeska look to settle lawsuit

A case in which Alyeska Pipeline Service Co. is suing one of its main regulators could be headed toward a settlement.

Alyeska sued the federal Pipeline and Hazardous Materials Safety Administration on Aug. 3, 2010, in the U.S. District Court for Alaska.

The operator of the 800-mile trans-Alaska pipeline brought the suit as a challenge to a $263,000 fine.

On May 6, federal attorneys filed a motion to stay the case for 45 days, until June 20, “to allow the parties to continue settlement discussions.”

U.S. District Judge John Sedwick granted the motion on May 10.

Two violations alleged

PHMSA issued a final order against Alyeska on Jan. 13, 2010, alleging the company committed two violations of pipeline safety regulations.

First, Alyeska was too slow to obtain a vendor’s full report on a 2004 pig run on the pipeline, PHMSA said. A pig is a device that travels through a pipeline to test for hazards such as corrosion.

Second, Alyeska failed to promptly repair a dent discovered during the summer of 2004 on top of a buried segment of pipe near mile 546.

Among other arguments, Alyeska said in its suit that the fine was excessive.

Alyeska is an Anchorage-based consortium that runs the pipeline for owners BP, ConocoPhillips, ExxonMobil, Chevron and Koch Industries.

—Wesley Loy